A Guide to Understanding Stamp Duty

Common Questions About Stamp Duty

Stamp duty is one of those extra costs that is easy to forget when you’re buying property, especially if you are a first home buyer. Depending on the property, you could be looking at tens of thousands of dollars in stamp duty to pay in quite a small timeframe. That’s why we have put together 5 common questions buyers need to know before purchasing property.

What is stamp duty?

Stamp duty is a form of tax that is usually required to be paid on a number of transactions, including property. It is an upfront cost that you have to consider when purchasing.

 

Who has to pay stamp duty?

In the case of property, it is the buyer who is obligated to pay. It is also important to remember that the stamp duty must be paid within 30 days of the settlement or else you may incur a penalty tax or interest.

 

How much is stamp duty?

The amount you will pay varies depending the value of the property you intend to buy and is also decided by different state and territory governments. There are concessions for first-time buyers, different rates if you’re buying land and also sometimes a separate mortgage duty to pay. Working out the amount you have to pay can become confusing due to the different approaches by each state.

 

How do you pay stamp duty?

State governments generally accept payments online, via credit/debit card or bank transfer. Some also accept payment via cheque. If you’re working with a solicitor or conveyancer, they will pay the stamp duty on your behalf but be sure to confirm this payment and ask for a duty statement for your own reference and peace of mind.

 

What is the money used for?

Stamp duty is invested into the economy by the state and territory governments. It goes to pay for a number of things including health services, roads, transport, police, emergency services, education, training and environmental services.

 

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